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The 7 Flavours of Brexit

July 9, 2017

Given the various articles etc on Brexit readers might find this guide to 7 flavours of Brexit from The Daily Telegraph of interest:-

Brexit Seven types of Brexit, from “soft” to “hard”

  • 1. Delayed Brexit

    aka “Transitional arrangements”

    The European Union has indicated its openness to the UK retaining its membership on a time-limited basis. More

    Advantages:

    • More time to negotiate a better Brexit deal

    Disadvantages:

    • Not a Brexit solution in itself
    • While a temporary EU member, the UK would continue to be bound by all regulations and budget requirements
  • 2. Single market access

    aka the “Norway model”

    Members of the European Economic Area fully participate in the EU’s single market. More

    Advantages:

    • The EU harmonises regulations and tariffs across member states. One key benefit is that services, a dominant sector of the UK economy, can be traded more easily between all EEA members

    Disadvantages:

    • EEA members must submit to EU regulations and contribute to the bloc’s budget, with diminished influence on setting policy
    • The EU is ideologically committed to preserving its “four freedoms” as indivisible – whereas the UK government wishes to restrict Freedom of Movement.
  • 3. Restricted single market access

    aka the “Switzerland model”

    The European Free Trade Association is an alternative European trade bloc, which already has free trade agreements with the EU. Switzerland effectively enjoys single market access through a series of bilateral treaties with the EU. More

    Advantages:

    • Limited access to the single market – although Switzerland’s financial services are excluded
    • Greater sovereignty – major EU policy decisions are put to national referendum before being adopted

    Disadvantages:

    • Part of the deal Switzerland made was to entirely adopt the EU’s “four freedoms” and in fact it joined the Schengen Area of free movement
    • Putting policy decisions to referendum on an ongoing basis could have undesirable results
  • 4. Customs union

    aka the “Turkey model”

    Customs union members do not charge import taxes on each other’s goods and agree a common tariff on goods from states outside the union. Turkey is the only external state to be a part of the EU’s customs union. More

    Advantages:

    • Less bureaucracy when shipping goods to and from the EU than some other options
    • There would be no hard border between Northern Ireland and the Republic

    Disadvantages:

    • Does not cover services
    • Customs union members are unable to negotiate independent trade deals
  • 5. Comprehensive trade deal

    aka “the Canada model”

    Leading proponents of 2016’s Leave campaign pointed approvingly towards Canada’s recently-signed free trade deal with the EU. CETA is more comprehensive than a standard free trade deal, offering a certain degree of access to the single market and some harmonisation of regulation between the two partners.

    Advantages:

    • Some single market access
    • Freedom to seek other trade deals
    • Room for negotiation on which EU rules to adopt

    Disadvantages:

    • Tremendously complex to work out – eight years after negotiations began, CETA is not ratified by national governments
    • Very little influence on ongoing EU policy
    • Likely toll on the UK’s financial sector, which the EU’s incumbent providers would want to be excluded from such a deal
  • 6. World Trade Organisation rules

    aka “No deal”

    With no EU deal in place, the UK would Brexit as a member of the World Trade Organisation, but no longer fully subject to the treaties negotiated on its behalf by the EU.

    Advantages:

    • Greater freedom to negotiate independent trade deals, within WTO restrictions

    Disadvantages:

    • Period of international financial limbo with no international trading status
    • Unprecedented legal situation, which may lead to WTO wrangles delaying even initial negotiation
    • Tremendously complex process involving many thousands of tariffs
    • Likely wholesale adoption of EU trade schedules as a basis for future trade
  • 7. Total free trade

    aka “the Singapore model”

    With no EU deal in place, the UK reverts to WTO rules, then drops tariffs on imports completely.

    Advantages:

    • Extremely simple and unlikely to be opposed by WTO members
    • The UK becomes a true free trader, owing allegiance to no-one

    Disadvantages:

    • Dropping import tariffs does not mean other countries will drop theirs against our goods
    • Likely decimation of UK manufacturing sector

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